You set up an English family trust years ago, perhaps on the advice of your solicitor in London, and the trust now holds a stone house in the Dordogne where the grandchildren spend every August. Then two letters arrive in the same month. The French notaire handling a family matter asks for a sworn translation of the trust deed and the full identity of the settlor, the trustees and every beneficiary. The French tax office writes about undeclared foreign arrangements and an annual levy. Since Brexit, British nationals are third-country nationals in France, and every cross-border structure, from a simple bank account to a discretionary trust, is examined more closely than before. This guide explains, entirely in plain English with UK spelling, what France understands by your English trust, what the trustee must declare and when, which annual taxes apply while the trust holds the French house, what happens to the house when a family member dies, and how to challenge a bill you believe is wrong. Every decisive rule below is linked to its official French source, so your adviser can verify each point before acting.
I. Your English Trust Has No French Equivalent: What France Understands by a Trust and What the Trustee Must Declare
A. How does France define your English trust, and why does the notaire ask who the settlor, the trustee and the beneficiaries are?
Start with the English side, because the French rules constantly refer back to it. On the British side, the official guidance states that a trust is a way of managing assets such as money, investments, land or buildings for people, and that trusts involve three roles: the settlor, who puts assets into the trust, the trustee, who manages the trust, and the beneficiary, who benefits from it (Trusts and taxes, gov.uk). A discretionary family trust, the most common vehicle for British parents and grandparents, adds one feature that matters enormously in France: nobody owns a fixed share until the trustees decide to appoint assets out, so for years at a time the house belongs economically to the family yet legally to no single individual.
French law has no equivalent. France knows the fiducie, a statutory contract defined by Article 2011 of the Civil Code in these words: “La fiducie est l’opération par laquelle un ou plusieurs constituants transfèrent des biens, des droits ou des sûretés, ou un ensemble de biens, de droits ou de sûretés, présents ou futurs, à un ou plusieurs fiduciaires qui, les tenant séparés de leur patrimoine propre, agissent dans un but déterminé au profit d’un ou plusieurs bénéficiaires.” The fiducie is a narrow, supervised, time-limited contract that cannot replicate an English family settlement, and the French notaire knows it. So when your trust appears in a French file, the notaire does not try to force it into the fiducie box. Instead, French tax law gives the English trust its own tailor-made definition, introduced by the rectifying finance law of 29 July 2011, Law number 2011-900, and now codified at Article 792-0 bis of the General Tax Code. That article provides: “on entend par trust l’ensemble des relations juridiques créées dans le droit d’un Etat autre que la France par une personne qui a la qualité de constituant, par acte entre vifs ou à cause de mort, en vue d’y placer des biens ou droits, sous le contrôle d’un administrateur, dans l’intérêt d’un ou de plusieurs bénéficiaires ou pour la réalisation d’un objectif déterminé.” Three points in that sentence decide everything that follows. First, the trust must come from a foreign legal system, which an English deed plainly does. Second, it can be created during life or on death, so both lifetime settlements and will trusts are caught. Third, French law renames your familiar characters: the settlor becomes the constituant, the trustee becomes the administrateur, and the beneficiaries become the bénéficiaires, with a protector, where your deed appoints one, treated as a person exercising effective control. Whenever this guide uses the French words, it means exactly the English persons you already know.
The same article adds a second definition with sharp practical teeth: where the trust was set up by a professional or a company, the constituant means the living individual who actually placed assets in it. British families sometimes settle property through a corporate trustee or an offshore service provider, and that sentence prevents anyone from hiding behind the company name. The French administration looks for the human being behind the structure, taxes by reference to that person, and asks the notaire to identify them before any French conveyance or succession file can move forward. Since Brexit this identification step has become systematic rather than occasional. British parties are now non-EU persons, French banks apply enhanced checks to trust-related transfers, and notaires routinely require the full deed with a sworn French translation plus a legal opinion explaining who can validly sign for the trust under English law. Families who arrive with those papers ready save months; families who treat the trust as invisible lose them.
Two misunderstandings should be cleared up at once. The first is that a trust avoids French tax through its opacity. It does the opposite: French law presumes that a foreign trust touching France must be declared, and the declaration duties described below apply whether or not the trustees consider themselves UK-resident. The second is that English trusteeship rules govern the French tax treatment. They do not. English law decides who the trustees are and what they may do; French law decides what France taxes, who must declare, and when the charge bites. Keeping those two planes separate is the key to every successful file.
B. What must the trustee declare to the French tax office every year and on every change, and what happens if nobody declares?
The centrepiece of the French system is a declaration duty that falls on the trustee, the administrateur, personally. Article 1649 AB of the General Tax Code casts the net deliberately wide: “L’administrateur d’un trust défini à l’article 792-0 bis dont le constituant ou l’un au moins des bénéficiaires a son domicile fiscal en France ou qui comprend un bien ou un droit qui y est situé, l’administrateur d’un trust défini à l’article 792-0 bis établi ou résidant en dehors de l’Union européenne lorsqu’il acquiert un bien immobilier ou qu’il entre en relation d’affaires en France au sens de l’article L. 561-2-1 du code monétaire et financier ainsi que l’administrateur qui a son domicile fiscal en France sont tenus de déclarer les informations suivantes”. In ordinary language, the trustee must file where any one of three triggers is met: the settlor or at least one beneficiary is French tax resident, the trust holds an asset situated in France such as your Dordogne house, or, since the provision expressly targets non-EU trustees, the trustee acquires French property or enters a business relationship in France. A London-based trustee holding a French holiday home for a British family now resident in France can meet all three triggers at once.
What must be declared comes in two layers. The first layer is event-based: the creation, modification or termination of the trust, together with the content of its terms, must be reported, so every new deed, deed of appointment, retirement of a trustee or distribution that changes the trust must be notified. The second layer is personal and annual: the trustee must report the identity details of the beneficial owners, meaning every individual who is trustee, settlor, beneficiary or, where one exists, protector, plus anyone else exercising effective control, and must state the open-market value at 1 January of each year of the assets in the trust, worldwide where the relevant individuals are French tax resident and limited to French assets otherwise. Valuations must therefore be refreshed every single year, even where nothing has changed, and the file must track births, deaths, marriages, exclusions and appointments that alter the beneficiary class. Implementing regulations specify the forms and filing offices, which change from time to time, so the trustee should check the current return and recipient office each year rather than copying last year’s filing blindly.
Missing these filings is expensive, and the cost is designed to hurt. While the trust holds assets, Article 990 J of the General Tax Code imposes an annual levy in blunt terms: “Les personnes physiques constituants ou bénéficiaires d’un trust défini à l’article 792-0 bis sont soumises à un prélèvement fixé au tarif le plus élevé mentionné au 1 de l’article 977.” The same article fixes the base and the deadline: “Le prélèvement est assis sur la valeur vénale nette au 1er janvier de l’année d’imposition des actifs mentionnés à l’article 965 composant le trust”, and “La consistance et la valeur des actifs mentionnés à l’article 965 placés dans le trust sont déclarées et le prélèvement est acquitté et versé au comptable public compétent par l’administrateur du trust au plus tard le 15 juin de chaque année.” The trustee files the composition and value of the trust property and pays the levy to the competent public accountant by 15 June each year. Two reliefs exist, and both depend on clean paperwork: the levy is not due on assets that were included in a wealth-tax base and properly declared there, or that were declared under the Article 1649 AB procedure by a person not liable to wealth tax given the value of their estate. The statute rewards disclosure and punishes silence. Where the trustee defaults, the law turns to the family: “A défaut, le constituant et les bénéficiaires, autres que ceux mentionnés aux a et b du présent III, ou leurs héritiers sont solidairement responsables du paiement du prélèvement.” Settlor, beneficiaries and even their heirs can be pursued jointly for the unpaid levy, which is why beneficiaries who assumed the trustee handled everything sometimes discover a personal bill years later.
A second annual charge can run alongside the levy: French wealth tax on property, the impôt sur la fortune immobilière. Article 965 of the General Tax Code defines the base as follows: “L’assiette de l’impôt sur la fortune immobilière est constituée par la valeur nette au 1er janvier de l’année : 1° De l’ensemble des biens et droits immobiliers appartenant aux personnes mentionnées à l’article 964”, and Article 970 of the same code pulls trust property into that base: “Les actifs mentionnés à l’article 965 placés dans un trust défini à l’article 792-0 bis sont compris, pour leur valeur vénale nette au 1er janvier de l’année d’imposition, selon le cas, dans le patrimoine du constituant ou dans celui du bénéficiaire qui est réputé être un constituant en application du II du même article 792-0 bis.” The French house in the trust therefore counts in someone’s wealth-tax estate at its net open-market value each 1 January, either the settlor’s or, after death, a beneficiary treated as settlor, with debts on the property deductible under the normal rules. Our companion guide on French wealth tax for British owners works through the thresholds, deductions and filing mechanics in detail. The practical lesson for trustees is a yearly diary with three entries: refresh the valuation at 1 January, reconcile it across the trust return, the wealth-tax return and the levy computation, and file and pay by the spring deadline, keeping proof of every figure.
II. What Tax Does France Charge on a French House Held in an English Trust, and How Do You Challenge the Bill?
A. When does France charge succession duties on trust property, and at what rates and allowances does it charge them?
Death is where the largest bills arise, and the starting question is always the same: what part of the estate can France tax at all? Article 750 ter of the General Tax Code answers in two branches: “Sont soumis aux droits de mutation à titre gratuit : 1° Les biens meubles et immeubles situés en France ou hors de France”, followed by trust assets and other property, “lorsque le donateur ou le défunt a son domicile fiscal en France au sens de l’article 4 B”. Where the deceased was French tax resident, France taxes the worldwide estate. The second branch covers the reverse case: where the deceased was not French tax resident, France taxes movable and immovable property situated in France, whether held directly or indirectly. Residence therefore comes before everything. Article 4 B of the General Tax Code treats as French tax resident those who have in France their home or principal place of sojourn, and those who carry on a professional activity there otherwise than incidentally: “Sont considérées comme ayant leur domicile fiscal en France au sens de l’article 4 A : a. Les personnes qui ont en France leur foyer ou le lieu de leur séjour principal ; b. Celles qui exercent en France une activité professionnelle, salariée ou non, à moins qu’elles ne justifient que cette activité y est exercée à titre accessoire”. A parent who retired to France, joined the local health system and filed French resident returns falls under worldwide taxation; a parent who stayed in Kent and visited the Dordogne house for holidays exposes only the French-situs assets, but the French house is always within that charge.
Trust property is then taxed under the special succession rules of Article 792-0 bis of the General Tax Code, which apply the family link between the settlor and the beneficiary: “La transmission par donation ou succession de biens ou droits placés dans un trust ainsi que des produits qui y sont capitalisés est, pour la valeur vénale nette des biens, droits ou produits concernés à la date de la transmission, soumise aux droits de mutation à titre gratuit en fonction du lien de parenté existant entre le constituant et le bénéficiaire.” Gifts and inheritances of trust assets, including accumulated income capitalised inside the trust, bear transfer duties by reference to the relationship between the settlor and the beneficiary, on the net open-market value at the date of transfer. A distribution to the settlor’s own children is taxed at the parent-child scale; a distribution to a remote relative or a stranger is taxed at the correspondingly heavier scale. Where the transfer cannot be characterised as a gift or a succession at all, for example where assets linger in the trust after the settlor’s death without vesting in anyone, the statute imposes default duties at the top brackets of the statutory tables, and where the trustee is governed by the law of a non-cooperative state or territory within the meaning of Article 238-0 A, or where the trust was created after 11 May 2011 by a settlor then French tax resident, duties fall at the top bracket of Table III: “lorsque l’administrateur du trust est soumis à la loi d’un Etat ou territoire non coopératif au sens de l’article 238-0 A“, or the trust postdates that cut-off with a French-resident settlor, “les droits de donation et les droits de mutation par décès sont dus au taux applicable à la dernière tranche du tableau III de l’article 777” (Article 238-0 A, Article 777, Article 792-0 bis). The United Kingdom has an administrative assistance convention with France, so a properly run English trust with a UK trustee is examined under the standard family-link rules rather than the offshore branch, but trustees who route French property through entities in jurisdictions without such cooperation import the punitive branch into an otherwise ordinary family file.
Two features soften the charge for genuine families. First, the standard allowances apply: Article 779 of the General Tax Code provides that “il est effectué un abattement de 100 000 € sur la part de chacun des ascendants et sur la part de chacun des enfants vivants ou représentés par suite de prédécès ou de renonciation”, so each child of the settlor is taxed only after a 100,000 euro allowance on their share. Second, the surviving spouse or civil partner route, the treatment of gifts already given, and the interaction with an English will choosing English law for the succession are examined in our companion guides on French inheritance tax for British heirs and on English wills and French houses, which should be read alongside this guide where a death has already occurred.
The most litigated question is timing: at which date does France tax trust property when the settlor dies but the trust continues? The Cour de cassation, France’s highest court for tax matters, answered in a published ruling of 18 November 2020, appeal number 18-14.242, concerning an American revocable trust but stating a general principle the administration now applies to English trusts as well: “le fait générateur des droits de mutation à titre gratuit est constitué par le transfert de propriété, qui, s’agissant de biens placés dans un trust, s’opère par l’effet de la distribution de l’actif du trust au bénéficiaire final, au jour de sa clôture, laquelle peut être postérieure au décès du constituant” (Cass. com., 18 Nov. 2020, no. 18-14.242). The chargeable event is the transfer of ownership that occurs when the trust assets are distributed to the final beneficiary on winding up, and that date can be later than the settlor’s death. An assessment raised on the full value at the settlor’s death, before anything vested in anyone, may therefore be premature, while a family that treats a continuing trust as permanently sheltered is equally mistaken, because the bill arrives at distribution. The distinction between revocable and irrevocable trusts, between fixed entitlements and purely discretionary hopes, and between a settlor who truly walked away and one who kept the keys, decides which side of that line a file falls on.
That last distinction, whether the settlor genuinely divested themselves, has become the central battlefield. On 22 January 2025 the Commercial Chamber refused to send a constitutional challenge on trust taxation to the Constitutional Council, decision number 24-16.995, in a case where the Paris court had found that the deceased had never irrevocably parted with property placed in two Bermuda-law trusts and had taxed his heir accordingly. The heir argued that taxing him on property never devolving to him at death breached equality before public burdens: “Les dispositions du 1° [de] l’article 750 ter du code général des impôts, en leur version applicable avant la loi du 29 juillet 2011, portent-elles atteinte au principe constitutionnel d’égalité devant les charges publiques découlant de l’article 13 de la Déclaration des droits de l’homme et du citoyen de 1789 lorsqu’elles sont interprétées de telle sorte que l’héritier d’une personne ayant constitué un trust qui ne s’éteint pas au décès de cette dernière est redevable des droits de mutation à titre gratuit sur des biens qui ont été apportés au trust et qui ne sont pas dévolus à cet héritier à raison de ce décès ?” The Court answered that the question was not new and not serious, and restated the governing test: “il appartient au juge d’analyser le fonctionnement concret du trust concerné afin de rechercher si le constituant a, dans les faits, continué à exercer à l’égard des biens placés dans le trust des prérogatives qui sont révélatrices de l’exercice du droit de propriété, de telle sorte qu’il ne peut être considéré comme s’en étant véritablement dessaisi” (Cass. com., 22 Jan. 2025, no. 24-16.995). Judges must examine how the trust actually worked: did the settlor keep revoking, appointing, directing investments, living in the house or taking the income at will? Only where the settlor never truly and irrevocably parted with the property are the heirs required to return it in the succession. The criminal chamber applies the same lens to prosecutions for failure to declare trust assets, asking whether the settlors had genuinely divested themselves, with possession rather than paperwork as the criterion (Cass. crim., 6 Jan. 2021, no. 18-84.570). For British families the message is concrete: a settlor who kept a power of revocation, a power to add and remove beneficiaries, a right to direct the trustees, or free personal use of the French house will find it very hard to argue that the property had left the taxable estate, while a clean, historic, irrevocable settlement whose trustees act independently stands on far stronger ground.
B. How do you correct a mistake, claim relief and challenge a French tax assessment on trust assets?
Challenges succeed where they are methodical, and the method starts with reading the assessment correctly. Identify which tax has been raised: the annual Article 990 J levy, wealth tax on property, or succession duties after a death, for which year, on which legal basis, and against whom, trustee, settlor, beneficiary or heir. Each has its own deadline, its own valuation date and its own reliefs, and confusing them is the most common way families lose winnable cases. Check residence first using the Article 4 B test quoted above: a UK-domiciled settlor taxed on a worldwide basis when only French-situs assets were chargeable, or a French-resident beneficiary assessed as non-resident and denied the corresponding logic, both produce bills that fall on re-examination. Check timing second using the 2020 ruling: where the trust continued after death and nothing vested, duties computed as if a full transfer occurred at death may be premature, and the file should evidence the trust’s continuation, the absence of distribution, and the date of any later appointment out. Check substance third using the 2025 test: gather the deed, all deeds of appointment, letters of wishes, trustee minutes and bank mandates, and ask honestly whether the settlor retained powers revealing ownership. A frank internal review at this stage is worth more than any argument later, because the administration will conduct exactly the same review.
Valuation and allowances come next. Every charge in this guide is computed on net open-market value, valeur vénale nette, at a precise date: 1 January of the tax year for the levy and wealth tax, the date of transfer or distribution for succession duties. Estate-agent brochures, developer optimism and UK probate figures converted at the wrong rate do not meet that standard. Commission an independent French valuation anchored to the exact date, deduct genuine liabilities on the property, and keep the valuer’s reasoning in the file. Then apply the allowances the family may have forgotten: the 100,000 euro parent-child allowance per child, the effect of earlier gifts that consume or refresh allowances over time, and, for the annual levy, the relief where the assets were already included in a wealth-tax base and properly declared or returned under the trust disclosure procedure. Where the house is held through a family property company inside or alongside the trust, our guide on the British family SCI explains how the company layer interacts with the trust layer, because the administration will look through both. Where British inheritance tax has also been charged on the same property, assemble every HM Revenue and Customs assessment, receipt and computation: the succession treaty mechanics and the five-year claim logic set out in the heirs guide apply, and double proof is the price of double relief.
Procedure then takes over, and French tax procedure rewards the prompt and punishes the passive. File a written complaint, the réclamation, with the office that issued the notice, within the complaint period printed on it, setting out the correct legal basis with the official references used in this guide, attaching the trust deed with its sworn translation, the distribution history, the valuation report, the residence evidence and the British tax papers, and asking precisely for discharge or reduction. Ask the office for a written ruling before any planned distribution where the treatment is uncertain, because a distribution fixes facts that cannot be undone. If the administration maintains the charge, the dispute moves to the administrative court, where judges re-examine facts and law together, and further appeal lies under the ordinary rules. Throughout, respect payment discipline: enforcement does not always wait for the outcome, so pay or formally request a stay where the rules require it, and keep copies of everything sent with proof of posting. Families who discover an old deed of appointment that changes the beneficiary class, who realise a protector’s powers were never disclosed, or who face a solidarity claim as heirs of a beneficiary should seek advice early rather than after the complaint window closes. The combination of short complaint periods, the 15 June annual cycle and the succession filing timetable means delay directly destroys rights, while a complete, translated, valued and referenced file, built around the settlor-trustee-beneficiary triangle the notaire asked about on day one, gives the administration something it can say yes to and a judge something that can be defended.
Conclusion
An English trust holding a French house passes through French law in a fixed order, and respecting that order is what keeps the bill lawful and no larger than the statutes require. First, France names the players under Article 792-0 bis: your settlor is the constituant, your trustees are the administrateurs, your beneficiaries and protector are déclarants in the disclosure chain, and no fiducie comparison changes those roles. Second, the trustee declares: event filings on every creation, change and termination, plus the yearly return of identities and 1 January values, because silence triggers the annual levy at the top rate, solidarity claims against the family, and a wealth-tax base that the administration will reconstruct without your evidence. Third, death is taxed by family link on net value at transfer, softened by the 100,000 euro allowance per child, timed at distribution where the trust continues past death following the 2020 ruling, and tested on genuine divestment following the 2025 decisions, with offshore routing attracting the top bracket. Fourth, errors are corrected with evidence, not indignation: residence proof, distribution history, honest valuation, forgotten allowances, treaty papers, and a written complaint inside the deadline, escalated to the court where needed. Assembled in that sequence, a Franco-British trust file ends as it should: the Dordogne house stays in family hands, each person pays no more than the statute demands, and no tax is paid twice on the same walls.
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